Problem 1: Many citizens who believe that the rich should pay more in taxes argue that the taxes levied on corporations should increase. Is it likely that increased taxes on corporations will increase taxes paid by the rich? In your answer make sure you consider all possibilities for the incidence of the tax and make your assumptions explicit.
Problem 2: Assuming that corporations maximize profits and investors maximize the return to their investment, explain how the corporate income tax will prevent efficiency from being attained.